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China says world trade system not flawless, needs reform

Leticia Stanley |Friday, September 14, 2018

Running Out of Tariff Options, China Takes Aim at American Companies

Washington has invited Beijing to hold new talks on their escalating tariff dispute, the Chinese foreign ministry said Thursday, ahead of a decision by President Donald Trump on whether to raise duties on $200 billion of Chinese imports.

The two governments have imposed 25 percent tariffs on $50 billion of each other's goods.

Businesses received potentially good news on Wednesday after US Treasury Secretary Steven Mnuchin proposed a fresh round of trade talks between the economic superpowers to avert a full-blown trade war.

So far, the United States and China have hit $50 billion worth of each other's goods with tariffs in a dispute over USA demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy programs, and better protecting American intellectual property.

The negative impact of the tariffs on USA firms has been "clear and far-reaching", according to a joint survey by AmCham China and AmCham Shanghai.

"The Trump administration should not be mistaken that China will surrender to the USA demands".

A survey from AmCham China and AmCham Shanghai found that almost two-thirds of more than 430 USA firms in China say the tariffs Trump placed on billions of dollars of Chinese goods this summer have hurt their businesses.

Half the respondents reported they had endured more inspections, delayed customs clearance and other forms of heightened regulatory scrutiny.

China has threatened retaliation, which could include action against USA companies operating there.

His remarks come as China and the United States may return to the negotiating table with the threat of new US tariffs looming.

The chairman of the American Chamber of Commerce in China warned the Trump administration might be underestimating China's resolve to fight back.

A U.S. Treasury spokesman did not respond to requests for comment.

He vowed last week to increase tariffs to hit an additional US$200 billion in Chinese imports "very soon" unless China agreed to steps that would reduce its massive trade surplus. They said almost one-third are thinking about canceling or postponing investment decisions.

"We share the concerns of the United States regarding China's trade and investment practices, but continuing along the path of tariff escalation is extremely unsafe", warned Harborn.

The two chambers of commerce on Thursday urged the USA and Chinese governments to resume negotiations.

More than 60 per cent of U.S. companies polled said the United States tariffs were already affecting their business operations, while a similar percentage said Chinese duties on USA goods were having an impact on business.

About 30% of firms said they were shifting parts of their supply chains away from China and the United States to buy components from other places. -China Business Council, said this week Chinese officials told it they were postponing accepting license applications from American companies in financial services and other fields until relations improve.

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